Recent high prices for crude oil and natural gas (outside
the US) are spurring increased interest in other conversion
technologies, such as coal gasification, to process lower-value
hydrocarbonfeedstocks into higher value end
products.1Fig. 1 compares the projected prices of crude oil,
natural gas and low-rank coals.1,2

Liquid fuels, including gasoline, diesel, naphtha and jet
fuel, are usually processed by refining crude oil. Due to the
direct distillation, crude oil is the most
suited raw material for liquid fuel production. However, with
rising crude oil prices and depleting reserves, gas-to-liquids
(GTLs) and coal-to-liquids (CTLs) processes are alternative
routes used for liquids production. Natural gas and coal are
converted to syngas first, and then the well-proven
Fischer-Tropsch (FT) technology is used to convert the
syngas to a raw product, which is further upgraded to produce
primarily premium diesel, naphtha and jet fuel.

Commercial GTL plants have been operating successfully for
many years at various parts of the world, as shown in
Table 1. However, the scarcity and premium
prices of natural gas at certain geographical locations make
coal gasification an economically viable alternative route. Due
to faster depleting natural gas reserves and more abundant coal
reserves, coal gasification and CTL are solutions to produce
liquid fuels over the long term.

Fig. 2 compares the proven reserves of
crude oil, coal and gas worldwide.3 It has been
estimated that there are over 847 billion tons of proven coal
reserves. Accordingly, there are enough coal supplies to last
nearly 118 years at present production rates. In contrast,
proven oil and gas reserves are equivalent to around 46 to 59
years at present production levels.

Fig. 2. Global
proven reserves of crude oil,
coal and natural gas.

Coal reserves are available in almost every country worldwide,
with recoverable reserves in 70 countries. The largest reserves
are in the US, Russia, China and India. With faster depleting
reserves of oil and gas, coal presents an attractive
alternative option for making liquid fuels. A new proprietary
coal gasification technology uses an advanced design
gasifier.a This article integrates technology for
coal gasification with FT synthesis and product upgrading
units.

Maturity of FT technology

FT technology is a well-proven, mature process, and it is
used to convert syngas into clean, high-quality liquid fuels,
including ultra-clean diesel and jet fuels. Depending on coal
quality and process technology, the CTL process can also yield
quantities of naphtha and ammonia as byproducts. The FT process
produces superior quality diesel that has virtually no sulfur
(< 5 ppm), is very low in aromatic content (< 1%) with a
high cetane number (> 70) and good cold-flow characteristics
(< 5°C10°C).4

The FT-derived diesel can be used as blendstock against
high-aromatic, low-cetane No. 2 heating oil at a ratio of 1/1
to make onroad diesel. The produced naphtha is highly
paraffinic with very low-sulfur, naphthenic and aromatic
content; it is suitable as a quality feedstock for conversion
into other fuels or cracked to produce ethylene for the polymer
industry. Fig. 3 shows the FT process, which
has three main processing steps, all of which are commercially
proven.5Table 1 lists successful
applications of FT technologies in existing commercial CTL and
GTL plants.

Fig. 3. Main
processing steps of FT process.

Variety of liquid products from coal

In addition to synthetic oil and diesel fuels, numerous
additional products can be derived from coal, as listed in
Fig. 4.6 The CTL process can
provide several key benefits, such as:

Yielding a coal-derived diesel that can be used as clean
transportation fuels

Using low-cost coal that is available domestically in
appropriate geographical regions.

Fig. 5 illustrates the CO2
emission reductions with CTL diesel through CCS. CO2
emissions are reduced by 5%12% for CTL diesel with CCS
when compared to diesel produced from crude oil.

Fig. 5.
Well-to-wheels emissions of CO2 from
diesel.

Geographical regions worldwide for CTL

There are numerous CTL projects worldwide, and Fig.
6 provides a broad overview of these various CTL
projects. Blue-coded locations denote CTL plants in operation,
and green-coded units are projects underway. From Fig.
6, it is noted that the majority of CTL projects are
concentrated in Asia-Pacific with a significant presence in
China, India and Indonesia. There are five operating CTL plants
in China (Yitai, LuAn and JMG are semi-commercial) and
two plants in South Africa. There are three CTL projects in
India, five in Australasia (Australia and New Zealand), and one
in Canada.

Fig. 6. CTL plants
and projects worldwide.

Global liquids production

Fig. 7 shows the projection from 2009 to
2035 in liquids supply and demand by region.1 From
Fig. 7, the Organization for Economic
Cooperation and Development (OECD) includes developed nations,
while non-OECD includes developing countries. Total use of
liquids is similar in the reference, high-oil-price and
low-oil-price cases, ranging from 108 million bpd (MM bpd) to
115 MM bpd in 2035, respectively. Although total gross domestic
product (GDP) growth is assumed to be the same in all three
cases, non-OECD GDP growth is lower in the low-oil-price case
and higher in the high-oil-price case, thus changing the shares
of global liquids consumed by OECD and non-OECD countries among
the three cases. In the reference case, OECD liquids
consumption grows to 47.9 MM bpd, while non-OECD liquids use
grows to 62.9 MM bpd, in 2035. Fig. 8 shows
the projection in unconventional liquids as a share of the
total global liquids projection.1

Fig. 7. Global
liquids supply and demand by
region.

Fig. 8.
Unconventional liquids as percentage of
total world liquids.

Global 2009 production of liquid fuels from unconventional
resources was 4.1 MM bpd, or about 5% of the total liquids
production. Production from unconventional sources grows to
10%, 12% and 17% of total world liquids production for the
low-oil-price, reference and high-oil-price cases,
respectively. The increased unconventional production in the
high-oil-price case is supported by CTL and GTL technologies
becoming more economical. Production levels from unconventional
sources such as CTL and GTL are driven largely by price level
and the need to compensate for restrictions on economic access
to conventional liquid resources in other nations. Fig.
9 shows the projected unconventional liquids
production by fuel type.10

Fig. 9. Projected
unconventional liquids
production by fuel type.

From Fig. 9, the projections in
unconventional liquids produced from coal tremendously increase
from 2008 to 2035. Fig. 10 shows FT liquid
fuels production 1990 (historic) to 2030
(projected).11 At high oil prices, CTL looks
particularly attractive in countries possessing abundant coal
reserves, large energy requirements and inadequate reserves of
crude oil and natural gas. From Fig. 10, it is
expected that CTL liquid fuels production will be preferred
over GTL.

Fig. 10. FT
liquid-fuels production.

Most of the announced, commercial-scale CTL projects are in
China, as shown in Fig. 11.11 With
completion of these announced projects, China will be the world
CTL leader within the next decade. Many projects are designed
to coproduce chemicals, including ammonia. The longer-term
development of a global CTL industry may depend on advancements
in CO2 sequestration that allow projects to produce fuels with a
lower carbon footprint.

Fig. 11. FT
liquid-fuels production from CTL
process.

CTL process

Fig. 12 is a block-flow diagram of an
advanced CTL process. It uses a proprietary gasifier that is
integrated with typical FT synthesis and upgrading
units.a The gasifier is compatible with a wide range
of feedstocks, particularly low-rank
coals with high moisture and ash content. This CTL process is
briefly summarized here:

Fig. 12. Block-flow
diagram of CTL process.

Coal preparation. Dried, pulverized coal is
fed to the pressurized gasifier unit through a system of lock
hoppers. The coal feed fluidizes as it enters the gasifier.

Air separation unit. The proprietary CTL
process uses oxygen (O2) provided by a cryogenic air
separation unit (ASU) as the O2 in the gasifier.

Coal gasification. Dried, pulverized coal,
oxygen and steam are fed to the proprietary gasifier; coal
gasification reactions occur in the resulting fluidized bed in
the high-velocity transport regime. Steam is added
to the gasifier, both as a reactant and as a moderator to
control the reaction temperature at about 980°C.

Gasifier ash removal system. A proprietary
continuous coarse ash depressurization (CCAD) system withdraws
the coarse ash from the gasifier and maintains the solids level
within the desired range. The ash withdrawn is cooled with
boiler feedwater (BFW), depressurized continuously through a
number of stages of pressure-letdown devices and routed to an
ash silo.

Syngas cooling. The hot syngas exiting the
gasifier is cooled in the primary syngas cooler with BFW to
produce high-pressure superheated steam.

Particulate control device (PCD). The warm
syngas containing fine ash from the syngas cooler flows into
the PCD, which is a barrier-filter system to remove
particulates. The produced syngas is particulate-free, thus
eliminating dirty-water or gray-water systems.

Sour shift. Part of the syngas from the PCD
is sent to a saturation column, where the syngas is contacted
with recycled condensate (water) to generate steam. This
mixture of steam and syngas is sent to the sour-shift reactors.
The fraction of total gas that is shifted is set by the desired
H2:CO ratio at the inlet of the FT synthesis
unit.

COS hydrolysis. The remaining (unshifted)
syngas stream is sent through the catalytic carbonyl sulfide
(COS) hydrolysis reactor to convert COS to hydrogen sulfide
(H2S). The sour-shift reactor catalyst also promotes
hydrolysis of COS to H2S from the syngas, which
eliminates the need for a separate COS hydrolysis reactor for
the portion of syngas that is being shifted.

Water recovery. Syngas streams leaving the
sour-shift reactor and the COS reactor are individually cooled
to condense water from the sour syngas. The water dissolves
almost all of the nitrogenous compounds, chlorides and
fluorides present along with lesser amounts of CO2,
carbon monoxide (CO), H2S and COS. This aqueous
mixture is removed from the syngas and recycled to the
saturator system.

Mercury removal. The unshifted syngas
stream from the COS reactor is cooled and combined with the
shifted syngas and sent to the mercury removal unit. Elemental
and any organic mercury present in the gas are adsorbed by the
sulfur-impregnated activated carbon beds.

CO2 compressor. The combined
acid-gas stream recovered from the AGRU at a low pressure and
slightly above ambient temperature is routed through one or
more CO2 compression trains to provide a dense-phase
CO2 at about 155 bara. The compressed CO2
is expected to have a purity of > 96 mol% CO2 and
about 0.5 mol% H2S.

FT synthesis and upgrading. Clean,
sulfur-free syngas is sent to the FT reactors to produce
hydrocarbon liquid products and reaction water. The light
hydrocarbon liquids (condensate), along with liquid hydrocarbon
wax removed from the FT reactor, are sent to the
product-upgrading unit for further processing. The
product-upgrading unit separately treats the hydrocarbon
condensate and hydrocarbon waxy liquid. The hydrocarbon
condensate is mildly hydrotreated to eliminate olefins and
oxygenates. The waxy liquid is sent to an
isomerization/dewaxing unit to convert the paraffins into
premium-quality distillates. The FT process converts the clean
syngas into finished products, including FT-based diesel,
naphtha, kerosine and liquefied petroleum gas.

Offgas treatment. The offgas from FT
synthesis containing valuable light hydrocarbons and unreacted
H2 and CO is hydrotreated, shifted and sent to a
steam-methane reformer to recover the syngas/hydrogen value.
After CO2 removal, the reformed gas is sent to a
pressure swing absorption (PSA) unit to recover pure
H2, which is compressed and mixed with the treated
synthesis gas entering the FT synthesis section providing the
desired H2:CO ratio. This significantly reduces the
amount of shifting required for the gasifier outlet gas. Waste
gas from the PSA unit is fully utilized as fuel for the
reformer furnace. The CO2 recovered in the
reformed-gas AGRU is completely sulfur free. It can be
compressed and exported for enhanced-oil recovery (EOR) and/or
sequestration. This sulfur-free CO2 can also be sold
as food grade or sent to urea plants after appropriate
treatment steps.

CTL plant performance data

Table 2 summarizes the typical coal
composition and high heating value for a low-ranked coal used
in gasification. Table 3 lists production
products and consumption for a typical 20,000-bpd CTL
plant.

FT diesel and naphtha pricing. FT diesel
has superior qualities with no/very-low-sulfur and
low-aromatics content, high-cetane and good cold-flow
characteristics; thus, its price is comparable to
ultra-low-sulfur diesel (ULSD) prices.11 For this
economic analysis, a 5% premium on present ULSD pricing is
assumed to estimate the FT diesel price. The present selling
prices of ULSD and naphtha in Singapore, Europe, US Gulf Coast and
Mediterranean are listed in Table
4.11 Based on the ULSD density of 876
kg/m3 and naphtha density of 740 kg/m3,
the selling prices of ULSD and naphtha in Europe are
calculated.12,13 Adding a 5% premium to the ULSD
prices yielded the FT diesel prices, as summarized in
Table 4.

FT diesel cost of production. Table 5 lists
the FT diesel production costs in Asia and the US. The assumed
selling prices for compressed CO2 and the IRR are
also listed in Table 5. The compressed
CO2 at pressures of 155 bara are suitable for either
EOR and/or storage. The plant-gate selling prices of compressed
CO2 ranging between $25/ton to $35/ton are reported
in literature.14

Best market for CTL is Asia-Pacific

Table 6 shows the profitability of CTL
projects in Asia-Pacific and the US. The capital cost (CAPEX)
for the CTL project in Asia-Pacific is only 70% of that for the
US Gulf Coast. Thus, a CTL project can be extremely profitable
in Asian markets such as India, China and Indonesia, where
the cheap, low-rank coals are abundantly available and natural
gas and crude oil reserves are scarce and/or priced at a
premium.

The US market is less attractive than Asia, since the CAPEX
for CTL is extremely high and abundant, lower-cost natural gas
resources make the GTL process more suitable. At an IRR of 15%,
the CTL is economically viable in the US.

The European market is also not very
attractive for CTL due to high CAPEX. The Middle East/Arab Gulf
market is also not attractive for CTL due to extremely abundant
resources of crude oil, making refining the best option for
liquids, and a significant amount of natural gas, making GTL
the second best option.

Sensitivity analysis of CTL production in
Asia-Pacific

Since the estimated cost of production of liquid fuels
depends on assumptions, it is important to identify the
sensitivities of these factors on the liquid-fuel production
cost. Fig. 13 shows such a sensitivity
analysis. The blue lines in Fig. 13 indicate
the effect of an increase in each factor on FT diesel
production cost, while yellow lines indicate the effect of a
decrease in the factor.

As illustrated in Fig. 13, the FT diesel
production cost is most sensitive to CAPEX. Increasing the
CAPEX by 25% increases the FT diesel production cost by 31%,
while decreasing the CAPEX by 25% decreases the FT diesel
production cost by 31%. Typically, the CAPEX in India and China
are 70% of the CAPEX on the US Gulf Coast. The cost of coal has
the second highest impact on the FT diesel production cost.
Increasing the coal cost to $30/ton ($2.7/MMBtu) increases the
production cost by 13%, while decreasing the coal cost to
$10/ton ($0.9/MMBtu) decreases the production cost by 13%.
Oxygen is also a raw material in addition to coal; the oxygen
cost is already included in the CAPEX as part of the ASU. It is
not explicitly used as a variable for sensitivity analysis.
Plant availability and corporate tax rates have the least
impact on the production cost. Present inflation rates in the
US, China and India are 3.6%, 5% and 9%,
respectively.79 The inflation rates are varied
in the economic analysis to cover various geographical
regions.

What price of crude oil makes CTL more attractive?

CTL is estimated to be economically more attractive than refining when the selling price for
crude oil is between $55/bbl and $65/bbl (US 2007 dollars)
using a WTI benchmark.15 These prices include the
costs of capturing about 90% of CO2emissions from the CTL plant, but do
not assume any income or outlays associated with sequestering
that CO2. The FT diesel can be produced at $1.7/gal
to $2/gal (January 2007 dollars), directly comparable to refinery gate prices of ULSD, which
is $2.41/gal.16 At world crude oil prices of between
$60/bbl and $100/bbl (2007 dollars), direct economic profits
are more likely.15 Lower world oil prices will
likely be the result of any increase in liquid-fuel production,
either domestically or abroad, from unconventional resources.
Based on examining a broad range of potential responses by the
Organization of the Petroleum Exporting Countries (OPEC), it is
anticipated that world oil prices will drop by between 0.6% and
1.6% for each million barrels of unconventional fuel production
that would not otherwise be on the market. Further, this price
decrease should be close to linear for unconventional-fuel
additions of up to 10 MMbpd. Looking only at coal-derived
liquids, it is possible that total world production could reach
about 6 MMbpd by 2030.15

Future

Coal-gasification technology for liquid-fuel plants
offers an economically attractive option for manufacturing
liquid fuels, especially in Asian countries with large coal
reserves and limited or high-cost crude oil and natural gas
deposits, such as China, India and Indonesia. The prospect for
developing an economically viable CTL in the US looks
promising, although important uncertainties in future crude oil
prices and the environmental policies on
greenhouse-gas emissions exist. Coal gasification
technology for liquid fuel plants will ease the pressures due
to increasing global demand of liquid fuels and various
derivatives. Coal-gasification technology will find
increasingly greater use due to a wide range of coal feedstocks, particularly the
low-rank coals, which are cheap and abundant.
HP

The authors
Dr. Bharthwaj Anantharaman is a principal process
engineer in the ammonia and syngas technology at
Kellogg, Brown and Root (KBR) in Houston, Texas. Dr.
Anantharaman has authored papers in industry
magazines, presented talks at industrial conferences
and published a book entitled, Catalytic Partial
Oxidation Reaction Mechanisms: Commercial Application
to Industrial EthyleneEpoxidation. His
work focuses on both the technical and financial
aspects of chemical technologies with practical
applications. Dr. Anantharaman holds a BTech degree
in chemical engineering from Indian Institute of
Technology, Madras, a PhD in chemical engineering
from the Massachusetts Institute of Technology (MIT),
and a certificate in financial technology from the
Sloan School of Management of MIT.
Ron Gualy is vice president technology, coal
monetization with KBR in the US. He is working in the
technology business unit with responsibilities to
manage and to grow the gasification business line. He
is responsible for managing the execution of the projects, coordinating
with sales, and defining a technology strategy that
supports the present offering and technology
improvements. Prior to this assignment, he was vice
president technology acquisitions within the
KBRs technology business unit. Mr. Gauly is a
chemical engineer graduated from Texas A&M
University with more than 28 years of experience in
the industry and extensive worldwide business
exposure. He has over sixteen years of experience in
technology management and licensing activities, and
growing and managing a business line. In his previous
experience, he has participated in several new
technology development and commercialization
programs.
Debasree Chatterjee is working as process engineer in
coal monetization team in KBR Technology, Delhi. She
has worked in the field of coal gasification for more
than five years with different technology licensors.
She holds a MS degree in chemical Engineering from Indian Institute Of
Technology, Kanpur and BS degree from Jadavpur
University, Kolkata.
Siva Ariyapadi is technology manager, coal
monetization, for KBR (Houston). In his current role,
he supports KBRs coal gasification product line
with worldwide technology licensing, business
development and marketing efforts related to the
Transport Gasification Technology (TRIG). He has 15
years of industry experience in the energy and
chemicals business sectorincluding heavy-oil
upgrading, LNG process technology, gas
monetization, synthesis gas, coal gasification and carbon capture
technologies. He holds a PhD degree in chemical
engineering from the University of Western Ontario,
Canada.

Have your say

All comments are subject to editorial review.
All fields are compulsory.

CTL, CTG ?? The authors present a thorough review of much of the prior 'work' on the subject and should be proud of the completeness. asification of coal using an oxygen blown 'transport reactor (KBR technology) presents the best opportunity to capture the resulting CO2 for sequetration or enhancing oil production. However, the work fails to point out the capital (and maintenance, availability) are heavily driven by massive costs of the extensive heat exchange equipment needed in the overall process scheme. The thermodynamics dictate great thermal inefficiency as both primary reactions (gasification and F.T. to liquids or SNG) are highly exothermic. Co-location and integration of a highly endothermic process is needed to utilize the otherwise wasted 50%+ of the energy of the feedstock coal.